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4psProduct Price Place PromotionAdditional 3psPeople Processes Physical evidenceChinese Techniques/Inventionsn The compass: two millennia ago; the first application in the West was in 13th centuryn Gunpowder: around 250 ADn A seismograph: built in 132 ADn Silk: about 1200 BCn Paper: made from linen scraps in 200 BCn Porcelain: around 960-1279 n Printing: block printing in 1040; movable in 1314; Gutenbergs bible was printed in 1464Marketing DefinedMarketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably Chartered Institute of Marketing 2001Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Wider Definition of MarketingMarketing is to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the parties involved are met. This is achieved by mutual exchange and fulfilment of promises.(Grnroos, 1997) Shared Points Marketing is a management process Marketing is about giving customers what they want Marketing identifies and anticipates customer requirements Marketing fulfills customer requirements profitably The exchanges have value to customers, clients, partners and society at largeMarketing History and Business OrientationsProductionProduct SellingMarketing Ethical and Sustainable Marketing Production Orientationn MAKING PRODUCTS THAT ARE AFFORDABLE AND AVAILABLEn PRIME TASK OF MANAGEMENT IS TO ENSURE MAXIMUM EFFICENCYn IN CHINA FROM 1949 - 1979PRODUCT ORIENTATIONn CONSUMERS BUY ON THE BASIS OF QUALITYn ORGANISATION MUST IMPROVE QUALITY LEVELSn ASSUMES CONSUMERS WANT THE PRODUCT?n CONSUMERS DO NOT WANT PRODUCTS THEY WANT SOLUTIONS TO PROBLEMS!n DOES NOT SOLVE PROBLEM, THEY WONT BUY IT!SALES ORIENTATIONASSUMES CONSUMERS RELUCTANT TO BUYPRODUCTS “ARE SOLD NOT BOUGHT”O(jiān)RGANISATIONS BUILD STRONG SALES DEPARTMENTSNEED TO ACHIEVE “TARGETS” NEGLECTS CUSTOMER RELATIONSHIPMARKETING ORIENTATIONNEEDS OF THE BUYER DRIVES ALL ORGANISATIONS ACTIVITIESSATISFACTION IS THE MAIN AIM“FIND WANTS AND FILL THEM”!NOT “CREATE PRODUCTS AND SELL THEM”Sustainable MarketingThe establishment, maintenance and enhancement of customer relationships so that the objectives of the parties involved are met without compromising the ability of future generations to achieve their own objectivesSuccess Factors Narver and Slater 1990 Customer orientation who are they? Competitor orientationwho are they? Interfunctional orientation how can we work better togetherThe Marketing Mix: Productl Developmentl Managementl Features/benefitsl Brandingl Packagingl After-sales serviceThe Marketing Mix: Pricel Costsl Profitabilityl Value for moneyl Competitivenessl Incentivesl Pricing strategyThe Marketing Mix: Place Access to market Channel structure Channel management Retailer image LogisticsThe Marketing Mix: Promotion Communication mix Advertising Sales promotion Sales Public relations Direct marketingSummary Marketing identifies and anticipates customer requirements at a profit The marketing environmentS.T.E.P. SOCIOCULTURAL TECHNOLOGICAL ECONOMIC / COMPETITIVE POLITICAL / REGULATORYEconomic/Competitive Market structure Government policy Trading blocs Taxation Exchange rates Interest ratesMACRO ECONOMIC FACTORSl TAXATIONl GOVERNMENT SPENDINGl INTEREST RATESl INTERNATIONAL TRADING BLOCSCHALLENGES FACING CHINAl The high economic growth from exports and heavyl investment is hard to sustainl An increasing aging labor forcel High inflation l The possible bursting bubble of housing price l The widening gap between the rich and poorConsumer Buyer Behavior Consumer Buying Decision-Making Processl Individual influencesl Situational influencesl Group influencesl Marketing mixSituational (Environmental) Influences Sociocultural Technological Economic Competitive Political RegulatoryPersonalityPersonality can play a role in consumer behaviour, particularly with high involvement products (e.g., choice of holiday)Perceptions: 12 seconds Selective attention Selective perception Selective retentionAttitudes Cognitive beliefs Affective emotion Conative behavior e.g. presses all buttons BUT cant affordGroup MembershipAffects individuals by helping to Differentiate between essential and non-essential purchases Prioritise purchases where resources are limited Define meaning of a product and its benefits Foresee post-purchase implicationsOther Group Influences Social class Reference groups Family Culture Sub-cultureReference Groups Membership Aspirant Dissociative The Family as a Decision-Making UnitThe Decision-Making ProcessProblem RecognitionInformation search Information evaluationDecision Post-Purchase EvaluationInformation EvaluationInformation Evaluation involves a process of narrowing down a wide list of potential options to an evoked set, typically by constructing performance criteria with which to judge choices. Purchasing Situations Routine Limited ExtendedRoutine Problem-SolvingSituation Low risk, low pricePurchase stages Awareness Trial Repeat purchaseLimited Problem SolvingSituation Moderate price, moderate risk Relatively infrequent purchaseExtended Problem SolvingSituation High cost, high risk Infrequent purchase Post-Purchase Evaluation Affects likelihood of repeat purchase May evoke cognitive dissonanceHow to understand and predict behaviour Over time, different theories have gained and lost prominence Psychologists; sociologists; social anthropologists,and economists, contribute theories and evidenceMotivation Motivation refers to the processes that cause people to behave as they do. Motivation is an inner drive that reflects goal-directed arousal. Different types of need Different types of need exist: Utilitarian Desire to fulfil functional/practical need Hedonic Experiential needPrincipal Theories of Motivation Drive theory Human needs drive motivation Goal-oriented behaviour to restore balance = Homeostasis Expectancy theory Expectancy of achieving desired outcomes drives motivation Emphasis is on the pull exerted by positive outcome i.e. positive incentives rather than being pushed from within Consumer involvement A persons perceived relevance of the object based on their inherent needs, values and interests. Involvement is a motivational construct outcome of motivationInvolvement marketing implications High involvement marketing strategies Low involvement marketing strategies Opportunity to segment by involvement Brand loyalists Information seekers Routine brand buyers Brand switchers Strategies to increase involvement Appeal to consumer hedonic needs Use novel stimuli Use prominent stimuli Use celebrity endorsersValuesA value can be defined as a belief about some desirable end-state that transcends specific situations and guides selection of behaviourValue systems Every culture has a general set of core values which guide them.Types of consumer value Efficiency Excellence Status Self-esteem Play (see next slide for example) Aesthetics Ethics SpiritualitySummary The reasons people purchase any product can vary widely The same product can satisfy different needs Product involvement can range from high to low Values dictate the types of products we seek out or avoidSegmentationSegmentation DefinedSegmentation is the art of discerning and defining meaningful differences between groups of customers to form the foundations of a more focused marketing effort. Demographic Segmentation Age Gender Race Income Occupation Social status Family structurePsychographic Segmentation(i.e based on lifestyle) Lifestyle segmentation Categories Activities Interests Opinions Demographics e.g. usage segmentation in the soup market Dinner party starter Warming snack Meal replacement Recipe ingredient Easy office lunch e.g. Heinz Squeeze & StirBehaviour Segmentation End use Benefits sought Usage rate Loyalty Attitude Buyer readinessSegmentation Targeting StrategiesUndifferentiatedDifferentiatedConcentratedCriteria for Successful SegmentationDistinctivenessTangibilityAccessibilityDefendability SummarySegmentation helps to: Concentrate resources on key decision makers Form deeper relationships with users Differentiate ProductProduct DefinedProduct is a physical good, service, idea, person, or place that is capable of offering tangible and intangible attributes that individuals or organisations regard as so necessary, worthwhile or satisfying that they are prepared to exchange money, patronage or some other unit of value to acquire it.The Anatomy of a ProductProduct-based ClassificationDurableNon-durableServiceConsumer User-based ClassificationB2B User-based ClassificationsBRANDING BrandingBranding seeks to create and communicate a three-dimensional character for a product that is not easily copied or damaged by competitors efforts.A brand consists of any name, design, style, words, or symbols, singly or in combination, that distinguish one product from another in the eyes of the customer. BENEFITS OF BRANDING: CONSUMER PERSPECTIVE EASIER PRODUCT IDENTIFICATION COMMUNICATES BENEFITS AND FEATURES HELPS PRODUCT EVALUATION REDUCES RISK IN PURCHASING CREATES INTEREST / CHARACTER FOR PRODUCTBENEFITS OF BRANDING: MANUFACTURER HELPS CREAT LOYALTY DEFENDS AGAINST COMPETITION CREATES DIFFERENTIAL ADVANTAGE ALLOWS PREMIUM PRICING HELPS TARGETING / POSITIONING INCREASES POWER OVER RETAILERBENEFITS OF BRANDING: RETAILER BENEFITS FROM BRAND MARKETING SUPPORT ATTRACTS CUSTOMERSPackaging DefinedPackaging is any container or wrapping in which the product is offered for sale and can consist of a variety of materials such as glass, paper, metal or plastic. Aspects of Product QualityProduct ManagementThe Product LifecycleIntroduction Sales build slowly Low profits Generating awareness Building demandGrowth Rapid increase in sales Attention from competitors Profits start to rise Looking at improvements or modificationsMaturity Product aims achieved Growth levels off Heavy price competition Market is saturated and stableDecline Rate of decline can be controlled Could be the result of: Poor management Technological developments Changing consumer tastesProduct PositioningPerceptual mapsNew Product DevelopmentTypes of NewnessApproaches to NPDProactiveReactiveThe NPD ProcessDimensions Considered During The Business Analysis PhaseMarketing strategyProductionFinancial analysisCompetitive responseCommercialisation OptionsImmediate launch(national or international)“Sprinkler Strategy”Rolling launch (beginning with one region and expanding) “Waterfall Strategy”Why Might Products Fail? Small and/or inaccessible target market Insufficient differentiation Poor or inconsistent product quality Poor timing Poor marketingPeople/Teams Involved in NPDmarketing channels and logistics: retailers and wholesalers Marketing Channels DefinedA marketing channel is the structure linking a group of individuals or organisations through which a product or service is made available to the consumer or industrial user. Logistics后勤 DefinedLogistics is the process of strategically managing the movement and storage of materials, parts, and finished inventory from suppliers, through the firm and on to customers. supply chain: 供應鏈 complete sequence of suppliers that contribute to creating a good or service and delivering it to business users and final consumers. Intermediaries Physically move goods Add margin to the price of goods Perform functions to earn marginsThe Importance of Marketing Channels Intermediaries make distribution and selling processes more efficient. Intermediaries offers supply chain partners more than they could achieve on their own. Market Exposure Technical Knowledge/Information Sharing Operational Specialization Scale of operationOther Key Channel Functions Matching Needs with Products Physical distribution & Logistics Financing Risk takingValue-Added Services Provided by IntermediariesTypes of IntermediaryWholesalersFranchiseesAgents and brokersRetailersDistributors and dealersWholesaler DefinedA wholesaler is an intermediary which buys products in bulk, usually from manufacturers, and resells them to trade customers, usually small retailers. Retailer DefinedA retailer sells direct to the consumer and may either purchase direct from the manufacturer or deal with a wholesaler, depending on purchasing power and volume. Distributors DefinedA distributor or dealer is an intermediary who adds value through special services associated with stocking or selling inventory, credit and after-sales service. Franchisee DefinedA franchisee holds a contract to supply and market a product or service to the design or blue-print of the franchisor (the owner or originator of the product or service). Agent DefinedAn agent or broker is an intermediary who has the legal authority to act on behalf of the manufacturer, although they do not take legal title to the goods or handle the product directly in any way. logistics management The process of strategically managing the movement and storage of materials, parts, and finished inventory from suppliers, through the firm and on to customers Merchandise Lines Breadth of range represents the variety of different product lines stocked Depth of range defines the amount of choice or assortment within a product lineChannel Strategy DefinedChannel strategy refers to the approach taken about the allocation and performance of roles, the basis of remuneration within the system, and the effectiveness of alternative configurations in enabling market penetration to be achieved competitively and efficiently. Factors Influencing Channel StrategyOrganisational MarketProductEnvironmentBuyingMarket CoverageIntensive distributionSelective distributionExclusive distributionintensive distribution When a product or service is placed in as many outlets as possible and no intermediary is excluded from selling the product, Competition in Channels Horizontal Intertype Vertical Channel systemVertical Marketing System DefinedA vertical marketing system refers to a channel of distribution which is viewed as a coordinated whole and is effectively managed or led by one channel member. The leadership might be contractual, or derived from the power or dominance of one member, or arise from the ownership of other channel members by one organisation . Types of Vertical Marketing SystemsSummary the glue that makes the system work Complexity Information critical Lengthening leadtimes but faster consumer responsePrice: context and conceptsThe specialization and division of labour = efficiency Price Elasticity DefinedPrice elasticity is the responsiveness of demand to changes in prices. Elastic products are very responsive, so that a price increase leads to a fall in demand, while inelastic products are very unresponsive and thus a rise in price leads to little or no change in demand. elastic demand: A small percentage increase in price produces a large percentage decrease in quantity demandedDemand is price elastic, if the value of elasticity is greater than one. If demand for a good is price elastic then a percentage change in price will lead to an even larger percentage change in the quantity demanded.price inelasticDemand is price inelastic, if the value of elasticity is less than one. If the demand for a good is inelastic then a percentage change in the price will bring about a smaller percentage change in the quantity demanded.Factors Influencing Price Sensitivity Unique value effect Substitute awareness effect Difficult comparison effect Total expenditure effect End benefit effect Shared cost effect Sunk investment effect Price-quality effect Inventory effect PROMOTION Marketing communications and advertisingIntegrated Marketing Communications DefinedIntegrated marketing communications is a process which involves the management and organisation of all agents in the analysis, planning, implementation and control of all marketing communications contacts, media, messages and promotional tools focused at selected target audiences. The Promotion Mix The promotion mix is the specific blend of advertising, public relations, personal selling, and direct-marketing tools that the company uses to persuasively communicate customer value and build customer relationshipsThe Promotion MixAdvertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor Broadcast Print Internet OutdoorSales promotion is the short-term incentive to encourage the purchase or sale of a product or service Discounts Coupons Displays DemonstrationsPublic relations involves

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